Can you afford a home in NZ? Mark II

[Timmo]

Whether you can 'ride that wave' depends entirely on when you bought. It just isn't sustainable to maintain that high level of capital growth that the Auckland market has seen in the last 15 years (unless wages grow a heap to close the gap between median wages and median houses prices etc).

[Alex B]

About to buy my first home in Dunedin. 3 bed brick 1935 build but fully modern 100m2 on a 400m2 section so pretty small. Good family area of town, ....245k. Can afford repayments but I'll get a couple of flatmates in to offset costs. Got the Kiwisaver first home $5k free money and I can draw about 20k out of kiwi saver from what I've put in over the years too.

[Al]

Moving to Auckland in the new year, with my girlfriend and my income we can afford the repayments. Deposit, yeah maybe if I get some inheritance

[Bling]

What, why would you move up there??

Congrats Alex

Selling next year and starting a new place. Couldn't have picked a more expensive time to be doing so... fail.

Just saw this: http://www.nzherald.co.nz/nz/news/artic ... d=11366790
Quite interesting.

[Alex B]

Lots of red in Dunedin, which may explain the whole local MP's always being Labour thing.

[Al]

I like Auckland more and I'm looking at going to uni. The degree can only be done in Dunedin or Auckland. Girlfriend is a teacher, no teaching jobs in Dunedin.

[Bling]

Fair enough, just a temporary thing then?

Seems to be a lot of data missing from that link I posted. My place doesn't exist on it. Lots of areas I know there are houses have nothing.

[Bling]

Anyone still waiting for the price crash?

Dem Auckland house prices... *wince* shits gone mad.

[solitaire]

Can't see entry level housing ever crashing, there will always be someone waiting to buy.

middle to high range property though? Sure that could crash.

[Bling]

I just can't believe how mad the market is going. Surely it can't keep going at this rate, there just isn't that much money to go around

[solitaire]

I just can't believe how mad the market is going. Surely it can't keep going at this rate, there just isn't that much money to go around

If the interest rate ever goes up by a significant amount there will be some mortagee sales, perhaps some bargains to be had. But without intervention the entry level price will not fall because demand will always outstrip supply in Auckland.

Totally agree that it's unsustainable, people taking on a lifetime of debt for something pretty average. I'm just glad i got in when i did, at the time it was considered the worst time to buy and I remember people on here saying they were waiting, but 8ish years on it's turned out to be a good move for me.

[Bling]

Must have purchased at the same time I recall buying when prices were silly, but I wanted to get on the ladder anyway. Guess it paid off. I also remember people saying at the time, "nah, i'm waiting for the prices to drop". Same people are probably still saying that. Things will always trend upwards I think.

[Vertigo]

Basically whats happening is:

1) Investor A buys house. Places it on the market with a margin.
2) Investor B buys house. Places it on the market with a margin.

Where does the margin come from? Essentially, newcomers to the market. The very people buying into the housing profit hype are the ones propping it up. If you bought recently and are paying off a mortgage, you are propping up the people who are making money off of you. Without this new money, eventually prices would level off and there would be no more profit, without the investors going back to work.

So if you havent bought yet but are thinking about it, and yet have concerns about rampant parasitical property investment, reconsider - or buy elsewhere.

Personally, Im thinking about France.

[Vertigo]

Must have purchased at the same time I recall buying when prices were silly, but I wanted to get on the ladder anyway. Guess it paid off. I also remember people saying at the time, "nah, i'm waiting for the prices to drop". Same people are probably still saying that. Things will always trend upwards I think.

The only trend worth considering is the median multiple, and its currently approaching 9 in Auckland (and already is over 9 in some suburbs). 9x average annual income is not just unsustainable growth, its top heavy.

[Boosted_162]

We can't afford in Auckland, so the plan is to get far from Auckland

Fingers crossed i'll have a new job lined up on monday...

[Py7h0n]

Look at other big cities - Auckland is still cheap for what you are buying compared to other cities!

[Dell'Orto]

Depends which article you read, it's rated as one of the most expensive cities in the world.
Trying to buy again this year, and now the Wellington market is taking off. FML.

[thegreatestben]

Yay

[Dell'Orto]

It is handy, as I've forged paperwork to use your equity as my deposit, sorry about that.

[thegreatestben]

LOL enjoy your .5 bedroom duplex with that backing.

We've just paid our last installment at 6.29% and dropped back to 4.35% fixed for 1 year.
Raised the payment slightly so should be a lot more satisfying seeing the numbers change.

Mrs just got a new job too so a bit more income for us, we are placed a bit higher than the average household income for NZ but lower than for Wellington. I guess that's why we live in the Hutt